Fair Shipping v. Medel (G.R. No. 177907; August 29, 2012)


FACTS: On November 23, 1998, Medel was hired by Fair Shipping Corporation (Fair Shipping), for and in behalf of its foreign principal Kohyu Marine Co., Ltd. (Kohyu) Medel was employed as an Able Seaman of the vessel M/V Optima.

On board M/V Optima, Medel figured in an unfortunate accident. During the conduct of emergency drills aboard the vessel, one of Medel’s co-workers lost control of the manual handle of a lifeboat, causing the same to turn uncontrollably; and it struck Medel in the forehead. He was given first aid treatment and immediately brought to the hospital.

Medel was repatriated to the Philippines on March 13, 1999 and was admitted to the Metropolitan Hospital on the said date. Dr. Robert D. Lim, the company-designated physician examined Medel. Medel’s accident rendered him incapable of performing his usual or customary work for more than 120 days.

Thus, Medel filed a complaint against Fair Shipping and Kohyu to recover his disability benefits. The Labor Arbiter (LA) ruled in favor of Medel. However, the NLRC reversed the LA. The Court of Appeals reversed the NLRC and ruled that Medel is entitled to recover permanent total disability benefits.

Hence, this appeal. Fair Shipping and Kohyu argue that the 1996 POEA SEC does not state that the mere lapse of 120 days automatically makes a seafarer permanently and totally disabled.

ISSUE: Is Medel entitled to recover permanent total disability benefits?

HELD: The application of the provisions of the Labor Code to the contracts of seafarers had long been settled by this Court. In Remigio v. National Labor Relations Commission, we emphatically declared that: “the standard employment contract for seafarers was formulated by the POEA pursuant to its mandate under E.O. No. 247 to secure the best terms and conditions of employment of Filipino contract workers and ensure compliance therewith and to promote and protect the well-being of Filipino workers overseas. Section 29 of the 1996 POEA SEC itself provides that “all rights and obligations of the parties to the Contract, including the annexes thereof, shall be governed by the laws of the Republic of the Philippines, international conventions, treaties and covenants where the Philippines is a signatory.” The Labor Code defines permanent total disability under Article 192(c)(1), which states: “the following disabilities shall be deemed total and permanent-temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided in the Rules.”This concept of permanent total disability is further explained in Section 2(b), Rule VII of the Implementing Rules of Book IV of the Labor Code (Amended Rules on Employees Compensation) as follows: “a disability is total and permanent if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise provided for in Rule X of these Rules.”

In Vergara v. Hammonia Maritime Services, Inc., the Court discussed how the above-mentioned provisions of the Labor Code and its implementing rules should be read in conjunction with the first paragraph of Section 20(B)(3) of the 2000 POEA SEC, which states: “upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall this period exceed one hundred twenty (120) days.”

Unmistakably, from the time Medel signed off from the vessel on March 13, 1999 up to the time his fitness to work was declared on February 11, 2000, more than eleven (11) months, or approximately 335 days, have lapsed. During this period, Medel was totally unable to pursue his occupation as a seafarer. DENIED.